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How does a Corporation move from one state to another?

  • April 1, 2007 5:30 AM EDT

    Steve,

    First a disclaimer-  Always consult an attorney on business formation issues, especially when it involves multiple states.

    That being said:

    Before re-incorporating in the new state, consider re-incorporating in another state that does not have an income tax (Nevada). Typically you can do this even if you have no physical presence in that state. Then when your LLC is formed there, the typical process is to apply to the state you wish to do business in to be admitted. In Florida, the fee for registering a foreign LLC is about $125.  This will allow you to expand to new states or a new state without having to reform or having to apportion taxes to both your state of formation and the state(s) you are doing business in.  Also, a Neveda LLC may have other benefits to you in the protection against litigation area-- again, consult an attorney on this one.

    Good luck on the migration.

    Brian

    ---
    Brian M Lewis, Certified Public Accountant www.brianlewiscpa.com Information provided for discussion purposes only. Always consult your own CPA for advice specific to your situation prior to making tax decisions.

    • 2 posts
    June 20, 2007 4:26 PM EDT

    I know this question was asked a while ago, but I had something else to ask along the same lines.

     

    I recently moved my corporation from OR to CA and was going to fill out the Foreign Corp paperwork until I can get a lawyer to help reorganize.

     

    For anyone who has filled out this form before, what did you put for the address of the principal executive office? I no longer have an address in OR. Maybe it won`t work for me to be a foreign corporation? I am going to hire a registered agent, as I was the registered agent before, and I am obviously no longer there. Could I use that address?

     

    Thank you for any ideas!

    • 2 posts
    June 21, 2007 8:21 AM EDT

    Thank you for your reply!

    Is a virtual office a valid choice for my principal office? I`ve never heard of it before! (I wikipedia-ed it! :)) Have you had any experience with one? So I assume all the official mail goes there, and I would need to have it somehow forwarded?

    Pardon my ignorance. Thanks for your help!

    Emily

    • 731 posts
    March 7, 2007 9:00 AM EST
    Well, there are two options one is dissolving the corporation, another is filing as a foreign corporation in the state you wish to do business in. Remember, if you apply in a different state as a foreign corporation you will have to pay taxes for that state and the state you originally formed your corporation in. There is really not much on this subject. But I was planning on moving back to NJ, so What I might do is, file as a foreign corporation for the first year and talk to a lawyer out there and have him do the paperwork.  

    ---
    Edgar Monroy
    Web Developer / Owner / Consultant
    When starting your own business the need to "know-how" is greater than money!
    http://www.nuevolution.net

    • 731 posts
    June 20, 2007 6:50 PM EDT
    Ok if you recently moved your corporation from Oregon, to California I am assuming you are residing in the state of California correct?
    I don`t see how its going to work for you unless you have a family member in Oregon that may be willing to let you use their address. Or get a Virtual office in the state of Oregon.

    You can use The Company Corporation as your registered agent, Its 215.00 a year for their service..

    I hope this works for you.. Keep in mind Cali Corps are expensive.

    ---
    Edgar Monroy
    Web Developer / Owner / Consultant
    When starting your own business the need to "know-how" is greater than money!
    http://www.nuevolution.net

    • 731 posts
    June 21, 2007 6:18 PM EDT
    Yes, the virtual office serves as the Corporations Address. This is
    where all your important information goes to.. The people that run the
    Virtual Offices usually send you everything to your address (where you
    are at now) My suggestion to you is why not just incorporate in the
    state of California since you`re here?

    ---
    Edgar Monroy
    Web Developer / Owner / Consultant
    When starting your own business the need to "know-how" is greater than money!
    http://www.nuevolution.net

    • 2 posts
    January 11, 2009 9:39 PM EST
    Steve/CollegeCoach,
     
    Looks like I`m coming in on this conversation a little bit late ;-)
     
    You actually have not two, but three options - and the third thus-far unmentioned option I think might be the best for both of you... (although without knowing your specific situation, it is impossible to give you my specific thoughts). It appears from your profiles that Steve, you make and sell cookies (manufacturing) and CollegeCoach, you do consulting, so we`ll go with that ;-)
     
    You can...
    1. Dissolve your existing entity and form a new on in your new state.
    2. Foreign qualify your existing entity in your new state.
    3. REDOMICILE your existing entity in your new state.
    The problem with #1 is that you would lose your original incorporation date. If you`ve had your business entity for even a year, it would be a shame to lose it date since banks, customers, and vendors considering giving you credit all generally look at this date. Think about it this way... would you rather loan money or do business with an entity who`s business was incorporated last month? or three years ago? (There is a reason that people put "Since 1995" or "25th Anniversary" in their advertisements! Not to mention that legally dissolving and then re-incorporating an entity - and potentially having to do taxes for both entities in the year you move is a lot of work and probably a lot of filing fees, accounting fees, etc. Not to mention there could be tax and other complications as well depending on where you are moving from or to. For example, if you did this at the end of the year moving into another state with an annual fee (which could be $500+), you might be liable for that minimum annual fee even though you were only there a month - and maybe didn`t even do business yet!
     
    Option 2 only makes sense if you currently reside in a tax or business entity friendly state such as Nevada, Wyoming, Delaware, or even Florida. You could then foreign qualify your business in the new state you`re moving to - or depending on your business type, you may be able to just keep your existing business where it is, then form a new entity in your new state to do work for your currently existing entity in the "tax friendly" jurisdiction. This can get complex. It is 100% legal, but you must find a CPA that absolutely knows what they are doing! Also, for manufacturing and consulting, it is not apparent that this would make immediate sense.
     
    3rd option, just redomicile your existing entity in your new state. If you are moving to Nevada or Wyoming - or somewhere it is actually desirable to incorporate, then all the better! (LOL) Basically, when you redomicile, everything stays the same except your business entity is just "moved" to your new state. There may be some extra fees involved in this initially, but it is worth it for the older incorporation date in most cases - after all, age on your business entity is very difficult (but not impossible) to purchase!
     
    I 100% agree with BrianTheAccountant`s suggestion that you consider a tax-friendly jurisdiction for your entity IF POSSIBLE. Note that no matter where you are incorporated, the general rule is that if you have employees or assets in a state, you must be either foreign qualified to do business in that state, or incorporated there.
     
    For a consultant such as CollegeCoach, if she is the only consultant in her business, and is doing all of her consulting in California, it would be a very interesting exercise to attempt to convince the California State Tax authority that its all your Nevada LLC ;-). I would not suggest you go there.
     
    For Steve, I assume he`s doing all of his cookie manufacturing himself now, but in the future once he`s shipping tons of cookies every month, using the same example of California, it might make a lot of sense to move the manufacturing and shipping operations to another tax-friendly state. He could then consult for that seperate cookie manufacturing company and send whatever % of profits he likes to be taxed in his home state using a seperate consulting company. (Again, note that this exercise is not for the neophyte, so you should get help setting up a strategy like this!).
     
    Good luck! (and send me some cookies!)

    ---
    Jennifer Reuting
    Author of LLCs for Dummies and Founder of MyLLC.com
    http://www.MyLLC.com

    • 2 posts
    January 11, 2009 10:11 PM EST
    Hi Emily80,
     
    A virtual office company such as Intelligent Office is fine for your principal office, however a virtual office may be cost prohibitive (generally $100+ a month! - and that`s on the cheap side).

    Also, note that there is a HUGE difference between a Virtual Office and a Registered Agent - they are completely different things! In most cases, I can`t imagine that you would really want a virtual office company attempting to act as a Registered Agent for your business entity anyway - kind of like asking your babysitter do minor surgery on the kids while you`re at a movie... sure it could work, but probably not the best idea. ;-)

    Most Registered Agents I know of will not let you use their address as your principal office address. There are exceptions, however I don`t believe the Registered Agent that Nuevolution suggested provides virtual office services or mail forwarding. However, there are companies that specialize in this.

    Also note that you can find Registered Agent Services for much cheaper than the company Nuevolution suggested for $215 including (my company) MyLLC.com where you can get it for only $99!

    While on the subject of registered agents, note that there are a number of other companies that can provide this for you but whatever you do, DO NOT ACT AS YOUR OWN REGISTERED AGENT! I am constantly telling (usually new) business owners that this is one of the stupidest mistakes you can make, so don`t do it! I see where you said you acted as your own agent before so consider this a mistake you already made ;-) Use a service company such as InCorp, CT, or MyLLC.com (or there are many others). Alternatively, use your attorney - or your CPA firm, but again, DO NOT ACT AS YOUR OWN AGENT! (LOL) Using any of these options, you are probably going to be spending under $.50 a day which is I`m sure far less than you probably spend on auto insurance, but for MUCH MORE protection!
     
    While I don`t know the size of your business, I`m assuming it is small and based on that if it were me, I would for the time being redomicile in California, or form a new entity there (and of course find an attorney or service company to act as your agent!)
     
    Good luck in your venture!
     
     
     
     

    ---
    Jennifer Reuting
    Author of LLCs for Dummies and Founder of MyLLC.com
    http://www.MyLLC.com

    • 1 posts
    April 21, 2009 4:34 AM EDT
    Jennifer,
    Could you please elaborate a little on why one should not act as their own Registered Agent?  I am in the process of moving my company to PA....Everyone kept telling me to form my LLC in the state of Delaware, so I did.  Now, I realize (just a couple months later) that is not the best thing to do.  I live in PA and it appears I can avoid a lot of fees by forming my LLC here.  Now, I`m trying to figure out the best (and least expensive) way to do that.  Since I just formed the company, I have not done any business yet, so the only sunk costs are the fees I paid to be in DE.  I actually have two companies that I will be moving back to PA -- one for my consulting and the other for an online company I am putting together. 

    I`m open to advice on whether to dissolve both and then reform in PA, or to redomicile.  Thanks for all the great help!

    • 1 posts
    November 8, 2008 8:42 PM EST


    I hope this works for you.. Keep in mind Cali Corps are expensive.




    Hey nuevolution
    Could you please elaborate on that? Do you mean the initial incorporation processes are expensive or the relocation or in general, corporate expenses like the annual charges that we will have to pay if we are incorporated in california?
    • 234 posts
    March 7, 2007 5:48 AM EST
    If a corporation is formed in one state, and the business wishes to
    move to another state how is this done? Can a corporation move or does
    the first corporation have to be dissolved and a new corporation formed
    in the new state?
    • 31 posts
    March 7, 2007 7:26 AM EST
    I am so glad you asked this. There is a possiblity that I may be moving states in the near future and I was wondering how does this affect my LLC. Thanks for asking, and I look forward to the responses.

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